Shareholders might have noticed that Group 1 Automotive, Inc. (NYSE:GPI) filed its annual result this time last week. The early response was not positive, with shares down 9.6% to US$354 in the past week. Statutory earnings per share fell badly short of expectations, coming in at US$25.13, some 21% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at US$23b. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following the latest results, Group 1 Automotive's seven analysts are now forecasting revenues of US$23.3b in 2026. This would be a reasonable 3.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 56% to US$42.90. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$23.5b and earnings per share (EPS) of US$43.31 in 2026. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

There were no changes to revenue or earnings estimates or the price target of US$459, suggesting that the company has met expectations in its recent result. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Group 1 Automotive at US$500 per share, while the most bearish prices it at US$390. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that Group 1 Automotive's revenue growth is expected to slow, with the forecast 3.4% annualised growth rate until the end of 2026 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 6.2% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Group 1 Automotive.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Group 1 Automotive's revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Group 1 Automotive. Long-term earnings power is much more important than next year's profits. We have forecasts for Group 1 Automotive going out to 2028, and you can see them free on our platform here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.